Tanjim Hasan Tamim/iStock via Getty Images Cabaletta Bio (NASDAQ:CABA) fast making headway with its lead asset CABA-201 for the treatment of patients with autoimmune disorders. This is a CD-19 CAR-T therapy being used for the treatment of patients with lupus nephritis [SLE of the kidney] and non-renal SLE as well. What makes this company unique would be its approach of attaching a 4-1BB co-stimulatory domain to the drug to enhance efficacy. The main form of the technology is known as Chimeric Antigen Re ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements and management's analysis of its financial performance [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents Cabaletta Bio's unaudited condensed financial statements, including balance sheets, operations, equity, and cash flows, with detailed notes [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) The condensed balance sheet shows the company's financial position as of September 30, 2023, compared to December 31, 2022, reflecting increased assets and equity from financing activities Condensed Balance Sheet Data (in thousands) | Assets & Liabilities | Sep 30, 2023 (unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $115,501 | $81,607 | | Short-term investments | $48,890 | $24,940 | | **Total Current Assets** | **$166,178** | **$108,834** | | **Total Assets** | **$173,287** | **$116,968** | | **Liabilities & Equity** | | | | Total current liabilities | $10,616 | $9,489 | | **Total Liabilities** | **$12,364** | **$12,448** | | **Total stockholders' equity** | **$160,923** | **$104,520** | | **Total Liabilities and stockholders' equity** | **$173,287** | **$116,968** | [Condensed Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported increased operating expenses and a larger net loss for both the three and nine months ended September 30, 2023, compared to the same periods in 2022 Statement of Operations Data (in thousands) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Research and development | $38,019 | $26,900 | | General and administrative | $13,495 | $10,937 | | **Total operating expenses** | **$51,514** | **$37,837** | | Loss from operations | $(51,514) | $(37,837) | | Interest income | $4,725 | $554 | | **Net loss** | **$(46,789)** | **$(37,283)** | [Condensed Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity increased from $104.5 million at the end of 2022 to $160.9 million as of September 30, 2023, primarily due to a public stock offering - Total stockholders' equity grew to **$160.9 million** at September 30, 2023, up from **$104.5 million** at December 31, 2022[83](index=83&type=chunk) - The primary drivers of the change in equity were net proceeds from the issuance of common stock, offset by a net loss of **$46.8 million** for the nine-month period[53](index=53&type=chunk)[83](index=83&type=chunk) [Condensed Statements of Cash Flows](index=10&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, cash used in operating and investing activities was offset by significant financing activities, resulting in a net cash increase Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(37,101) | $(34,249) | | Net cash used in investing activities | $(23,587) | $(26,901) | | Net cash provided by financing activities | $94,582 | $91 | | **Net increase (decrease) in cash** | **$33,894** | **$(61,059)** | [Notes to Unaudited Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) These notes detail the company's accounting policies, financial instruments, key collaborations, significant commitments, and recent financing activities, including stock offerings - The company expects its cash, cash equivalents, and short-term investments of **$164.4 million** as of September 30, 2023, to be sufficient to fund operations for at least 12 months[38](index=38&type=chunk)[60](index=60&type=chunk) - Under an agreement with IASO Biotherapeutics, Cabaletta paid a **$2.5 million** upfront fee and a **$1.0 million** milestone payment upon IND clearance for CABA-201, with IASO eligible for up to **$162 million** in total consideration plus royalties[73](index=73&type=chunk)[160](index=160&type=chunk) - The company amended its agreement with Oxford Biomedica to include the CABA-201 program, involving an upfront fee of **$0.5 million** and a vector supply agreement with costs up to approximately **$5.0 million**[3](index=3&type=chunk)[105](index=105&type=chunk) - In May 2023, the company raised net proceeds of **$93.8 million** from an underwritten public offering of **8,337,500 shares** of common stock at **$12.00 per share**[143](index=143&type=chunk)[235](index=235&type=chunk) - In December 2022, the company raised net proceeds of **$32.6 million** through an offering of common stock and pre-funded warrants[144](index=144&type=chunk)[573](index=573&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, and liquidity, focusing on cell therapy development, increased expenses, and capital resources - The company is a clinical-stage biotechnology firm focused on engineered T cell therapies for autoimmune diseases, with two main platforms: CARTA (e.g., CABA-201) and CAART (e.g., DSG3-CAART)[182](index=182&type=chunk) - As of September 30, 2023, the company had **$164.4 million** in cash, cash equivalents, and short-term investments, which is expected to fund operations into Q4 2025[174](index=174&type=chunk)[183](index=183&type=chunk)[330](index=330&type=chunk) - The FDA has granted clearance for four CABA-201 IND applications in 2023 for treating SLE, myositis, systemic sclerosis, and generalized myasthenia gravis[129](index=129&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Operating expenses increased significantly for both the three and nine-month periods ending September 30, 2023, compared to 2022, driven by higher R&D and G&A costs, partially offset by increased interest income Comparison of Operating Expenses (Nine Months Ended Sep 30, in thousands) | Expense Category | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Research and development | $38,019 | $26,900 | $11,119 | | General and administrative | $13,495 | $10,937 | $2,558 | | **Total operating expenses** | **$51,514** | **$37,837** | **$13,677** | - The **$11.1 million** increase in 9-month R&D expenses was driven by **$4.9 million** in personnel costs, **$3.7 million** in development services, **$2.4 million** in intellectual property license costs, and **$1.4 million** in clinical trial costs[171](index=171&type=chunk) - The **$2.6 million** increase in 9-month G&A expenses was primarily due to a **$1.9 million** increase in personnel costs from higher headcount and a **$0.6 million** increase in administrative costs[572](index=572&type=chunk) - Interest income for the nine months ended September 30, 2023, increased by **$4.2 million** year-over-year, driven by higher interest rates on larger cash balances from financings[7](index=7&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is strong, with $164.4 million in cash and investments, expected to fund operations into Q4 2025, though substantial additional financing will be needed for future development - The company had an accumulated deficit of **$212.4 million** as of September 30, 2023[231](index=231&type=chunk) - In May 2023, the company raised approximately **$93.5 million** in net proceeds from an underwritten public offering[208](index=208&type=chunk)[235](index=235&type=chunk) - The company maintains a **$100.0 million** "at-the-market" (ATM) offering program, under which no shares have been sold as of the report date[176](index=176&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is interest rate sensitivity on its $164.4 million in cash and investments, with no material impact from inflation or foreign currency risk to date - The company's main market risk is interest rate sensitivity affecting its **$164.4 million** in cash and investments[211](index=211&type=chunk) - The company does not believe inflation has had a material impact to date but acknowledges that rising costs could affect future clinical trials and labor expenses[211](index=211&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of the end of the period covered by the report[212](index=212&type=chunk)[244](index=244&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, such controls[575](index=575&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section details legal proceedings, key risk factors, equity sales, and other required disclosures [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) As of September 30, 2023, the company is not involved in any material litigation or legal proceedings that are expected to have a material adverse impact on its financial position, results of operations, or cash flows - The company reports no material litigation or legal proceedings as of September 30, 2023[246](index=246&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks, including clinical development, manufacturing, intellectual property, and the need for substantial future financing for the company's novel cell therapies - The company is a clinical-stage entity with a limited operating history and has incurred significant losses since inception, which are expected to continue[44](index=44&type=chunk)[351](index=351&type=chunk) - The business is highly dependent on the success of its initial product candidates (DSG3-CAART, MuSK-CAART, CABA-201), which require significant additional development and funding[15](index=15&type=chunk)[224](index=224&type=chunk) - The company relies heavily on intellectual property licensed from third parties, such as Penn and IASO, and the termination of these licenses would materially harm the business[23](index=23&type=chunk)[334](index=334&type=chunk) - Manufacturing of the company's cell therapies is complex, and the company is reliant on third parties like Penn and WuXi, posing risks to supply for clinical trials and commercialization[45](index=45&type=chunk)[432](index=432&type=chunk) [Risks Related to Clinical Development](index=37&type=section&id=Risks%20Related%20to%20Clinical%20Development) The company faces significant clinical development risks due to the novelty of its cell therapies, including potential severe adverse events, challenges with preconditioning regimens, patient enrollment difficulties, and the unreliability of early trial data - The company's product candidates could cause severe side effects like neurotoxicity and Cytokine Release Syndrome (CRS), which have been life-threatening in other CAR T trials[16](index=16&type=chunk)[220](index=220&type=chunk) - The use of preconditioning regimens (e.g., cyclophosphamide, fludarabine) in trials may increase the risk of adverse side effects and make it difficult to assess the efficacy of the product candidates alone[222](index=222&type=chunk)[286](index=286&type=chunk)[597](index=597&type=chunk) - Difficulties in enrolling patients in clinical trials for rare autoimmune diseases could significantly delay development activities and increase costs[45](index=45&type=chunk)[270](index=270&type=chunk) - Early, interim, or topline data from open-label trials are subject to change and may not be predictive of final results, posing a risk to investor perception and regulatory review[264](index=264&type=chunk)[297](index=297&type=chunk)[579](index=579&type=chunk) [Risks Related to Manufacturing and Supply](index=74&type=section&id=Risks%20Related%20to%20Manufacturing%20and%20Supply) Manufacturing the company's product candidates is a complex, patient-specific process with inherent risks, relying heavily on third-party manufacturers and a limited number of suppliers for critical raw materials - The company is reliant on Penn for manufacturing DSG3-CAART and CABA-201 and on WuXi for MuSK-CAART; failure or termination by these partners would disrupt operations[432](index=432&type=chunk)[434](index=434&type=chunk) - The manufacturing process is complex and susceptible to failures, including contamination, equipment failure, and inconsistencies in cell growth, which could lead to lot failures and supply disruptions[436](index=436&type=chunk)[437](index=437&type=chunk) - There is a limited number of manufacturers for the lentiviral vectors required for the company's product candidates, creating a significant supply chain risk[440](index=440&type=chunk)[472](index=472&type=chunk) [Risks Related to Our Intellectual Property](index=61&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's success depends heavily on maintaining intellectual property protection, primarily through in-licensed patents, facing risks of challenges, infringement claims, and difficulties in protecting trade secrets - The company heavily relies on in-licensed intellectual property from Penn, CHOP, and IASO; failure to comply with license terms could lead to the loss of rights essential to the business[334](index=334&type=chunk) - The company may be subject to lawsuits claiming infringement of third-party patents, which could block the commercialization of its products or result in significant damages and royalties[386](index=386&type=chunk)[387](index=387&type=chunk) - Some in-licensed intellectual property was developed with U.S. government funding, making it subject to federal regulations, including "march-in" rights and a preference for U.S. manufacturing[376](index=376&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=103&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities during the period covered by the report - The company reports no unregistered sales of equity securities[658](index=658&type=chunk) [Defaults Upon Senior Securities](index=103&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports that there have been no defaults upon senior securities - None[625](index=625&type=chunk) [Mine Safety Disclosures](index=103&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[647](index=647&type=chunk) [Other Information](index=103&type=section&id=Item%205.%20Other%20Information) This section is not applicable to the company - Not applicable[659](index=659&type=chunk) [Exhibits](index=104&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to bylaws and licensing agreements, as well as certifications by the Principal Executive Officer and Principal Financial Officer - Filed exhibits include the Second Amendment to the License and Supply Agreement with Oxford Biomedica and certifications required by the Sarbanes-Oxley Act[649](index=649&type=chunk)

1 • the potential advantages of our proprietary Cabaletta Approach for B cell Ablation platform, called our CABA TM platform, and our product candidates; • our ability to obtain funding for our operations, including funding necessary to initiate and complete our DesCAARTes TM trial, our MusCAARTes TMtrial, our planned clinical trial of CABA-201 and our ongoing preclinical studies of other product candidates; • the potential achievement of milestones and receipt of payments under our collaborations; • our ab ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-39103 CABALETTA BIO, INC. (Exact name of Registrant as specified in its Charter) Delaware 82-1685768 (State or other jurisdiction of ...

2 Cabaletta Bio° CARTA Strategy | CABA-201 (4-1BB CD19-CAR T) expecting 1H23 IND clearance1 CAART Strategy | DSG3-CAART & MuSK-CAART clinical studies evaluating combination regimens CAART – Chimeric AutoAntibody Receptor T cells; CARTA – Chimeric Antigen Receptor T cells for Autoimmunity; IND – Investigational New Drug; SLE – Systemic lupus erythematosus; RA – Rheumatoid arthritis 5 Chimeric Antigen Receptor T cells for Autoimmunity Fully Human Anti-CD19 Targeting Domain In autoimmune diseases with a limite ...

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited financial statements, management's discussion and analysis, market risk disclosures, and internal controls for the period [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed financial statements for the period ended September 30, 2022, show a net loss of **$37.3 million** for the nine-month period, an increase from **$32.4 million** in the prior year period, driven by higher research and development and general administrative expenses. The company's cash, cash equivalents, and investments decreased to **$85.9 million** from **$122.2 million** at the end of 2021, primarily due to cash used in operating activities. The company has no revenue and continues to fund operations through equity financing [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) The balance sheet reflects a significant decrease in total assets, primarily driven by a reduction in cash and cash equivalents Condensed Balance Sheet Data (in thousands) | Account | September 30, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $61,163 | $122,222 | | Short-term investments | $24,732 | $0 | | Total current assets | $88,175 | $124,541 | | **Total Assets** | **$91,675** | **$126,336** | | **Liabilities & Equity** | | | | Total current liabilities | $5,801 | $8,380 | | Total stockholders' equity | $85,874 | $117,956 | | **Total Liabilities and Stockholders' Equity** | **$91,675** | **$126,336** | - Total assets decreased by **27.4%** from December 31, 2021, to September 30, 2022, primarily due to a significant reduction in cash and cash equivalents used to fund operations[14](index=14&type=chunk) [Condensed Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The statements show an increased net loss for the nine-month period, primarily due to rising research and development and general and administrative expenses Condensed Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $8,216 | $8,169 | $26,900 | $22,575 | | General and administrative | $3,562 | $3,394 | $10,937 | $9,845 | | **Total operating expenses** | **$11,778** | **$11,563** | **$37,837** | **$32,420** | | Loss from operations | $(11,778) | $(11,563) | $(37,837) | $(32,420) | | **Net loss** | **$(11,427)** | **$(11,560)** | **$(37,283)** | **$(32,401)** | | Net loss per share | $(0.39) | $(0.45) | $(1.29) | $(1.31) | - For the nine months ended September 30, 2022, the net loss increased to **$37.3 million** from **$32.4 million** in the prior-year period, driven by a **19.2%** increase in R&D expenses and an **11.1%** increase in G&A expenses[17](index=17&type=chunk) [Condensed Statements of Cash Flows](index=10&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Cash flow statements indicate a significant increase in cash used for operations and a substantial decrease in cash provided by financing activities Condensed Statements of Cash Flows (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(34,249) | $(23,594) | | Net cash (used in) provided by investing activities | $(26,901) | $5,150 | | Net cash provided by financing activities | $91 | $35,275 | | **Net (decrease) increase in cash and cash equivalents** | **$(61,059)** | **$16,831** | | Cash and cash equivalents—end of period | $61,163 | $118,260 | - Cash used in operating activities increased by **45%** year-over-year for the nine-month period, reflecting higher net loss and changes in operating assets and liabilities. Financing activities provided minimal cash in 2022 compared to **$35.3 million** in 2021, which included proceeds from stock issuance[28](index=28&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) These notes provide critical context on the company's business model, financial position, liquidity outlook, and significant post-period events including a new license agreement and lawsuit dismissal - The company is a clinical-stage biotechnology firm focused on engineered T cell therapies for autoimmune diseases and does not expect to generate revenue until a product candidate is approved and commercialized[31](index=31&type=chunk)[33](index=33&type=chunk) - As of September 30, 2022, the company had cash, cash equivalents, and investments of **$85.9 million** and an accumulated deficit of **$149.9 million**. Management believes current cash will fund operations for at least **12 months** from the filing date[34](index=34&type=chunk)[35](index=35&type=chunk) - Subsequent to the quarter end, on October 7, 2022, the company entered into an exclusive license agreement with Nanjing IASO Biotherapeutics, involving a **$2.5 million** upfront payment and potential future milestones up to **$162 million**, plus royalties[93](index=93&type=chunk) - A shareholder class action lawsuit filed in February 2022, alleging misleading statements regarding the DesCAARTes™ trial, was voluntarily dismissed by the plaintiff on October 17, 2022[75](index=75&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's focus on developing engineered T cell therapies through its CABA™ platform, including CARTA and CAART approaches. The lead CARTA candidate, CABA-201, targets a broad range of autoimmune diseases, while the lead CAART candidate, DSG3-CAART, is in a Phase 1 trial for mPV. For the nine months ended September 30, 2022, R&D expenses increased to **$26.9 million** and G&A expenses rose to **$10.9 million**, contributing to a net loss of **$37.3 million**. The company believes its existing cash of **$85.9 million** will fund operations through the second quarter of 2024 but will require substantial additional financing for future development and commercialization [Business Overview and Pipeline](index=24&type=section&id=Business%20Overview%20and%20Pipeline) This section details the company's clinical-stage focus on engineered T cell therapies for autoimmune diseases, highlighting key candidates and their development status - Cabaletta is a clinical-stage company focused on engineered T cell therapies for autoimmune diseases, utilizing two platforms: CARTA (chimeric antigen receptor T cells for autoimmunity) and CAART (chimeric autoantibody receptor T cells)[97](index=97&type=chunk) - The lead CARTA candidate, CABA-201, is a CD19-CAR T therapy with potential across diseases like SLE, rheumatoid arthritis, and myositis. The company obtained an exclusive license for its CD19 binder from IASO in October 2022[97](index=97&type=chunk)[98](index=98&type=chunk) - The lead CAART candidate, DSG3-CAART, is in the DesCAARTes™ Phase 1 trial for mucosal pemphigus vulgaris (mPV). The company is prioritizing a combination sub-study with pre-treatment to follow the A5 cohort[99](index=99&type=chunk)[101](index=101&type=chunk) - The MuSK-CAART program for myasthenia gravis received FDA fast track and orphan drug designation, with plans to initiate the MusCAARTes™ trial in Q4 2022[101](index=101&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section analyzes the drivers behind the company's increased net loss, specifically focusing on the rise in research and development and general and administrative expenses Comparison of Operating Results (in thousands) | Period | R&D Expense | G&A Expense | Net Loss | | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30, 2022** | $8,216 | $3,562 | $(11,427) | | **Three Months Ended Sep 30, 2021** | $8,169 | $3,394 | $(11,560) | | **Nine Months Ended Sep 30, 2022** | $26,900 | $10,937 | $(37,283) | | **Nine Months Ended Sep 30, 2021** | $22,575 | $9,845 | $(32,401) | - For the nine months ended Sep 30, 2022, R&D expenses increased by **$4.3 million** year-over-year, primarily due to a **$3.2 million** increase in personnel costs from higher headcount and a **$1.3 million** increase in clinical trial costs for the DesCAARTes™ and MusCAARTes™ trials[131](index=131&type=chunk) - General and administrative expenses for the nine months ended Sep 30, 2022 increased by **$1.1 million** year-over-year, driven by a **$1.2 million** rise in personnel costs and a **$0.5 million** increase in administrative costs, partially offset by lower D&O insurance[133](index=133&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's cash position, accumulated deficit, and projected liquidity runway, along with past and potential future financing activities - As of September 30, 2022, the company had **$85.9 million** in cash, cash equivalents, and investments, with an accumulated deficit of **$149.9 million**[135](index=135&type=chunk)[136](index=136&type=chunk) - Management believes existing cash will fund operating expenses and capital expenditure requirements through the **second quarter of 2024**[138](index=138&type=chunk) - The company has an "at-the-market" (ATM) offering program for up to **$75.0 million**. In 2021, it sold **4.8 million** shares for net proceeds of **$48.3 million**. No shares were sold under the ATM program in 2022[140](index=140&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is interest rate sensitivity on its cash, cash equivalents, and investments, which totaled **$85.9 million** as of September 30, 2022. Due to the short-term nature of these holdings, management believes a **100 basis point** change in interest rates would not have a material effect. The company also notes potential impacts from rising inflation on labor and program costs - The company's main market risk is interest rate sensitivity on its **$85.9 million** in cash and investments. A **1%** change in interest rates is not expected to have a material effect on fair market value[156](index=156&type=chunk) - Inflation is identified as a risk that could increase the cost of labor and clinical trials, potentially affecting business operations[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2022. There were no material changes in internal control over financial reporting during the quarter, despite many employees working remotely due to the COVID-19 pandemic - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[157](index=157&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[160](index=160&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, comprehensive risk factors, and other miscellaneous disclosures relevant to the company's operations [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) A purported stockholder filed a class action complaint against the company and certain officers and directors on February 28, 2022, alleging false or misleading statements regarding the DesCAARTes™ Phase 1 clinical trial. This complaint was voluntarily dismissed by the plaintiff on October 17, 2022 - A securities class action lawsuit was filed against the company in February 2022 concerning disclosures related to the DesCAARTes™ trial[162](index=162&type=chunk) - The lawsuit was voluntarily dismissed by the plaintiff on October 17, 2022[162](index=162&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company outlines extensive risks related to its business, technology, and industry. Key risks include its early stage of development, the novel nature of its CAR T and CAAR T cell therapies, and the potential for serious adverse events like CRS and neurotoxicity. The company is highly dependent on the success of its initial product candidates (CABA-201, DSG3-CAART, MuSK-CAART) and faces challenges in clinical trial enrollment, manufacturing complexity, and reliance on third parties like the University of Pennsylvania. Financial risks include a history of net losses, the need for substantial additional funding, and potential stock price volatility. The company also highlights regulatory, intellectual property, and market competition risks - The company is in the early stages of development and its success is highly dependent on advancing product candidates through clinical trials and obtaining regulatory approval, which is a long and uncertain process[165](index=165&type=chunk) - Cellular therapies are a novel approach, and there is a risk of serious adverse events such as neurotoxicity and cytokine release syndrome (CRS), which could halt clinical development and negatively impact commercial potential[178](index=178&type=chunk) - The company has a history of net losses and anticipates incurring substantial losses for the foreseeable future, requiring significant additional financing to fund development and commercialization[261](index=261&type=chunk)[277](index=277&type=chunk) - The company relies heavily on in-licensed intellectual property and collaborations, particularly with the University of Pennsylvania (Penn) and IASO, and failure to maintain these agreements could severely harm the business[286](index=286&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=96&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - There were no unregistered sales of equity securities in the reported period[515](index=515&type=chunk) [Item 3. Defaults Upon Senior Securities](index=96&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities[516](index=516&type=chunk) [Item 4. Mine Safety Disclosures](index=96&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[517](index=517&type=chunk) [Item 5. Other Information](index=96&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the period - None[517](index=517&type=chunk) [Item 6. Exhibits](index=97&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate governance documents, the exclusive license agreement with Nanjing IASO Biotherapeutics, and officer certifications - A list of exhibits filed with the Form 10-Q is provided, including the Exclusive License Agreement with Nanjing IASO Biotherapeutics Co., LTD., dated October 7, 2022[519](index=519&type=chunk)[520](index=520&type=chunk)

Cabaletta Bio° Corporate Presentation SEPTEMBER 2022 © 2022 Cabaletta Bio. All rights reserved. Disclaimer The following presentation, including any printed or electronic copy of these slides, the talks given by the presenters, the information communicated during any delivery of the presentation and any question and answer session and any document or material distributed at or in connection with the presentation (collectively, the "Presentation") has been prepared by Cabaletta Bio, Inc. ("we," "us," "our," ...

Cabaletta Bio° Corporate Presentation AUGUST 2022 © 2022 Cabaletta Bio. All rights reserved. Disclaimer 2 The following presentation, including any printed or electronic copy of these slides, the talks given by the presenters, the information communicated during any delivery of the presentation and any question and answer session and any document or material distributed at or in connection with the presentation (collectively, the "Presentation") has been prepared by Cabaletta Bio, Inc. ("we," "us," "our," " ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Non-accelerated filer ☒ Smaller reporting company ☒ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_______________ to _______________ Commission File Number: 001-39103 CABALETTA BIO, INC. (Exact Name of Regist ...

Cabaletta Bio° Corporate Presentation MAY 2022 © 2022 Cabaletta Bio. All rights reserved. Disclaimer 2 The following presentation, including any printed or electronic copy of these slides, the talks given by the presenters, the information communicated during any delivery of the presentation and any question and answer session and any document or material distributed at or in connection with the presentation (collectively, the "Presentation") has been prepared by Cabaletta Bio, Inc. ("we," "us," "our," "Cab ...